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Wage inequality, minimum wage effects, and spillovers

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Stewart, Mark B. (2012) Wage inequality, minimum wage effects, and spillovers. Oxford Economic Papers, Vol.64 (No.4). pp. 616-634. doi:10.1093/oep/gps003

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Official URL: http://dx.doi.org/10.1093/oep/gps003

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Abstract

This paper investigates possible spillover effects of the UK minimum wage. The halt in the growth in inequality in the lower half of the wage distribution (as measured by the 50:10 percentile ratio) since the mid-1990s, in contrast to the continued inequality growth in the upper half of the distribution, suggests the possibility of a minimum wage effect and spillover effects on wages above the minimum. This paper analyses individual wage changes, using both a difference-in-differences estimator and a specification involving comparisons across minimum wage upratings, and concludes that there have not been minimum wage spillovers. Since the UK minimum wage has always been below the 10(th) percentile, this lack of spillovers implies that minimum wage changes have not had an effect on the 50:10 percentile ratio measure of inequality in the lower half of the wage distribution.

Item Type: Journal Article
Divisions: Faculty of Social Sciences > Economics
Journal or Publication Title: Oxford Economic Papers
Publisher: Oxford University Press
ISSN: 0030-7653
Official Date: October 2012
Dates:
DateEvent
October 2012Published
Volume: Vol.64
Number: No.4
Page Range: pp. 616-634
DOI: 10.1093/oep/gps003
Status: Peer Reviewed
Publication Status: Published
Access rights to Published version: Restricted or Subscription Access

Data sourced from Thomson Reuters' Web of Knowledge

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